Rejecting Microsoft’s 12 billion after a turnaround! Discord secretly applies for IPO with an estimated valuation of 15 billion USD

Discord applies for IPO secretly with the SEC, collaborating with Goldman Sachs and JPMorgan Chase. Valued at $15 billion in 2021, it previously rejected Microsoft’s $12 billion acquisition offer. Monthly active users exceed 200 million, with most revenue coming from Nitro subscriptions. The US tech stock IPO market is warming up, with $15.6 billion raised in 2025. Former Activision Blizzard executive Sakhnini took over as CEO last year to drive transformation.

Discord’s Strategic Shift from Rejection to Going Public

Sources revealed in March that this San Francisco-based chat app company is working with Goldman Sachs and JPMorgan Chase on an IPO. Discord’s platform is popular among gamers and programmers. According to a December last year statement, it has over 200 million monthly active users. Discussions are ongoing, and the company may decide not to go public, but sources say preparations are already underway.

In 2021, Discord was valued at about $15 billion during a funding round and rejected Microsoft’s $12 billion acquisition proposal. At that time, the tech stock bull market was at its peak, and Discord’s management believed the company’s value far exceeded Microsoft’s bid, choosing to remain independent. However, the current market valuation logic for high-growth tech stocks has shifted from focusing solely on revenue growth to emphasizing profitability and cash flow.

This change in valuation logic poses challenges for Discord’s IPO. Investors in 2021 were willing to pay a premium for high-growth stories, but by 2026, public market investors are more concerned with when profitability will be achieved. Whether Discord can maintain its $15 billion valuation or even achieve higher pricing in the public market will depend on investor confidence in its growth momentum in the post-pandemic era.

Founded in 2015, Discord offers voice, video, and text chat features. Its core platform is free, while paid Nitro subscriptions provide higher streaming quality and customization options. Although initially designed for gamers, users have created various themed servers, such as investment and community radio. This shift from vertical to horizontal expansion is a key driver of Discord’s valuation growth.

Three Pillars of Discord’s Business Model

Nitro Subscriptions (Core Revenue): Offers advanced streaming, custom emojis, and larger upload capacity, at $9.99/month

Server Value-Added Services: Community managers can purchase custom domains, enhanced management tools, and other paid features

Game Sales Revenue Share (Discontinued): Tried a game store model but shut it down in 2019, returning to a subscription model

Key Moment in the US Tech IPO Market Revival

The US tech IPO market is experiencing a significant rebound. Bloomberg data shows that last year, tech IPOs raised a total of $15.6 billion, more than doubling the amount in 2024. Companies like AI fleet management software firm Motive Technologies Inc. and travel app developer Klook Technology Ltd. have already filed IPO applications.

After nearly three years of sluggishness, the US IPO market is regaining growth momentum in 2025. However, market volatility caused by tariffs, prolonged government deadlock, and year-end sell-offs of AI stocks have dampened hopes for a stronger rebound. Discord’s decision to file at this time indicates management believes the current window is still viable or at least wants to be prepared to move quickly when market conditions improve.

Secret IPO filings are permitted under the US JOBS Act, allowing companies with lower annual revenue to conduct preliminary reviews without publicly disclosing financial data. This approach offers flexibility; if market conditions worsen or reviews face hurdles, companies can quietly withdraw without attracting public attention. Discord’s adoption of this route shows a cautious stance toward the current market environment.

During the 2021 tech IPO frenzy, many companies rushed to go public, only to see their stock prices plummet. Star IPOs like Robinhood and Coinbase still trade below their offering prices. Discord’s management has evidently learned from these lessons, choosing a more cautious timing and thorough preparation. Collaborating with Goldman Sachs and JPMorgan Chase also underscores its focus on underwriting quality, as these firms have extensive experience in tech IPOs and can help set reasonable valuations and issuance strategies.

Challenges in Business Transformation Under the New CEO

Humam Sakhnini, a former senior executive at Activision Blizzard, took over as CEO last April, succeeding co-founder Jason Citron. This personnel change signals a shift toward more mature corporate governance, aiming to expand beyond core gamers into diversified community applications like investment and music, to build a more sustainable business model that meets public market shareholder expectations.

Sakhnini’s experience at Activision Blizzard involved strategizing the commercialization of major titles like Call of Duty and World of Warcraft. This experience is crucial for Discord, which needs to enhance monetization without alienating its core user base. Excessive commercialization could drive users away, but lacking clear profit pathways may fail to convince public investors.

Discord faces pressure from state governments over child safety measures. About 15% of its staff work on safety, including using machine learning to identify and remove harmful content and employing community moderators. These high safety investments increase operational costs but are essential in the current regulatory environment. If the platform suffers a major scandal post-IPO due to safety issues, its stock could be severely impacted.

A Discord spokesperson told Bloomberg, “The company will continue to focus on providing the best experience for users and building a strong, sustainable business.” This standard cautious statement during the secrecy period neither confirms nor denies the IPO plans.

Overall, Discord’s IPO will test market willingness to value social platforms. With competitors like Meta and Reddit already listed, Discord needs to demonstrate its unique value and growth potential. Its 200 million monthly active users form a strong foundation, but converting these users into sustainable revenue and profit remains the core challenge in its IPO roadshow.